ABUJA, Nigeria (VOICE OF NAIJA)-The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Ojulari, has revealed that Nigeria’s state-owned refineries were operating at a monumental loss to the nation, a situation that compelled his leadership team to suspend operations in order to prevent further destruction of value.
Ojulari made the disclosure on Wednesday in Abuja during a fireside chat titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026, where he provided rare insight into the commercial and operational challenges facing NNPC’s refining assets.
He said public frustration over the refineries was understandable, considering the huge sums of public funds invested over the years and the high expectations attached to the facilities.
“On the refineries, Nigerians were angry. A lot of money has been spent, and expectations were very high. So we were under extreme pressure, extreme pressure,” Ojulari said.
Ojulari admitted that when he assumed office, refining was not his primary area of expertise, having spent most of his career in the upstream segment of the industry, but noted that his position demanded swift learning and accountability.
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“My background is upstream, so I was on a vertical learning curve. You are accountable, so you must learn very quickly. Otherwise, there is no escape,” he said.
He explained that once his management team conducted a thorough review of refinery operations, the financial reality became obvious.
“The first thing that became clear, and I want to say this very clearly, is that we were running at a monumental loss to Nigeria. We were just wasting money. I can say that confidently now,” he stated.
Ojulari disclosed that NNPC was regularly supplying crude cargoes to the refineries each month, but utilisation rates remained at about 50 to 55 per cent, leading to substantial value erosion.
“We were spending a lot of money on operations, a lot of money on contractors. But when you look at the net, we were just leaking away value,” he said.
He added that the lack of a clear pathway to recovery made the situation even more concerning.
“Sometimes you make a loss during investment, but you have a line of sight to recovery. That line of sight was not clear here,” Ojulari noted.
Consequently, he said the first major decision of his administration was to halt refinery operations to stem further losses and allow for a rapid reassessment.
“We decided to stop the refinery and do a quick check. We planned that if things were lined up, we would reopen and work on them,” he said.
Ojulari further explained that part of the value loss was linked to the quality of products being produced, citing the Port Harcourt Refinery as an example.
“The crude we were taking into Port Harcourt was producing mid-grade products. When you aggregate their value compared to what you put in, it was a waste,” he said.
He acknowledged that the decision to shut down the refineries was politically sensitive, given the historical pressure on NNPC to keep them running to guarantee fuel supply.
“There were political pressures to keep the refinery product, lots of pressure. But when you have been trained for over 35 years to focus on commerciality and profitability, you can’t sleep with that,” he said.
Nigeria’s four state-owned refineries Port Harcourt (two plants), Warri, and Kaduna have for decades operated well below capacity despite repeated turnaround maintenance projects that have cost billions of dollars.
At various times, the facilities have either run at single-digit capacity or been completely shut down, leaving Africa’s largest oil producer heavily dependent on imported fuel.
Between 2015 and 2023, successive governments approved multiple rehabilitation contracts, yet domestic refining output remained minimal, intensifying public scrutiny of NNPC’s efficiency.
Ojulari’s remarks represent one of the most forthright admissions by an NNPC chief executive that continued refinery operations, under existing conditions, were economically indefensible.
The comments also highlight a wider shift within NNPC, under the Petroleum Industry Act, towards stronger commercial discipline, even in politically sensitive areas such as domestic refining.